Sector Sketch and SWOT Analysis of the Dutch Oil Sector Final Presentation Dutch Ministry of Economic Affairs Oil Division,The Hague, 3rd February 1999,天马行空官方博客：http:/t.qq.com/tmxk_docin ；QQ:1318241189；QQ群：175569632,A conflict appears to be emerging between the traditional Dutch economic strengths and more recent environmental concerns,Dutch economic prosperity,Oil industry focussed on exports,Founded on trading,Motor of Rotterdam trading strength,Dutch environment,Legitimate environmental concerns,High population density low-lying - vulnerable to Global warming,Global warming Congestion Noise,Export industry must be internationally competitive to survive,Tough environmental stance,Conflict,Contents,Page,A. Extracts from Sector Sketch B. Feedback from oil and chemical company interviews C. SWOT Analysis C.1. Strengths C.2. Weaknesses C.3. Opportunities C.4. Threats D. Recommendations,4 7 11 12 17 23 26 31,A. Extracts from Sector Sketch,天马行空官方博客：http:/t.qq.com/tmxk_docin ；QQ:1318241189；QQ群：175569632,The Dutch oil industry has traditionally been strong and internationally orientated,Only 15% of total oil supply destined for home market Accounts for 9% of EU refining capacity Key synergies with and supply to Dutch chemicals industry Benelux chemical cluster is second largest in Europe,Rotterdam worlds leading port for 30 years Road, rail, inland waterway and pipeline connections to many major markets,Major oil trading market in the EU time zone and one of the big 3 globally (Rotterdam, Houston, Singapore),Each sector in the oil industry faces important issues affecting its competitive position,Oil refining,Increasing costs of environmental compliance Mergers/alliances change the competitive scene Overcapacity and low returns,Storage,Supports the international business Fosters independent traders Overcapacity and low returns,Trading,Strong role of refining companies Dependent on critical mass of Rotterdam market,Bunkering,Important fuel oil outlet for refiners Refiners becoming dominant,Pipelines,Pipelines and waterways key to Rotterdam logistical advantage Dominated by private or consortium owned pipelines,Chemicals,Important synergies with oil sector Sector entering downturn Long-term growth potential,B. Feedback from oil and chemical company interviews,Environmental and clean-up regulations were central to views expressed by most interviewees,Role of the Netherlands,Decision making bodies,Land release,Current situation,Industry viewpoint,Alternative approach,Goes ahead of competing countries on environmental issues,This undermines competitive position of oil and chemical industries,Lead by influencing EU consensus rather than by example,Significant regional and national variation on environmental regulationsCompetition to be greener,Variation prevents the existence of a level playing field,Place environmental decision making and implementation in the hands of one body,Clean-up costs are a formidable exit barrier,Land can be released if economically viable,Costs of clean-up should be balanced against cost of land reclamation,However, the governments willingness to discuss and reach consensus was appreciated,All interviewees recognised the World Class infrastructure of Rotterdam, although there are three major contentious issues,Port fees,Common carrier pipeline,Maasvlakte 2,Current situation,Industry viewpoint,Alternative approach,Harbour dues based on tonnage rather than services used,Rotterdam is more expensive than Antwerp, Le Havre or Hamburg. The oil industry subsidises the container industry,Base charges more on services than on tonnage basis,No common-carrier pipeline exists,May be economically viable,Consider common carrier where extra flexibility needed, but compensate owners of pipelines for investment and risk,Positive discussion likely: new land reclamation at high cost,Extra land will favour chemical sectorThe oil industry does not require extra land,Ensure proper funding for Maasvlakte 2:No burden on oil industry,Pressure for rationalisation is likely to coincide with timing of investment to meet future fuel specifications,Overcapacity,Future fuel specifications,Current situation,Industry viewpoint,Despite recent closures, there remains up to 15% overcapacity,As many as 13 EU refineries need to close Issue complicated further by recent mergers Clean-up costs remain the biggest barrier to exit; social costs are also significant,Target specifications for 2005 require 40 bn investment across the EU,Of the Dutch refineries, only Esso and Shell are well placed to meet 2005 specs without major investment,C. SWOT Analysis,C.1. Strengths,The Dutch oil sector is large and well concentrated, accounting for 9% of EU refining capacity (compared to 4.5% consumption),Europoort,Pernis,Crude Capacity (b/d),Nerefco,Shell,Esso,Total,KPI,S&H,374,000,400,000,180,000,148,000,70,000,10,000,Botlek,Vlissingen,+,x,Amsterdam,Europoort,79,500,Koch,Europoort,Source: Ministry of Economic Affairs,